Economy of the People's Republic of China

:The economies of Hong Kong and Macau are separate from the rest of the People's Republic of China. This article is on the economy of mainland China. See also: Economy of Hong Kong and Economy of Macau

Foreign investment

Foreign investment stalled in late 1989 in the aftermath of the Tiananmen protests. In response, the government introduced legislation and regulations designed to encourage foreigners to invest in high-priority sectors and regions. A significant example of this is the Encouraged Industry Catalogue which sets out the degree of foreign involvement allowed in various industry sectors.

Related Topics:
Tiananmen protests - Encouraged Industry Catalogue

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

In 1990, the government eliminated time restrictions on the establishment of joint ventures, provided some assurances against nationalization, and allowed foreign partners to become chairs of joint venture boards. In 1991, the PRC granted more preferential tax treatment for Wholly Foreign Owned Enterprises and contractual ventures and for foreign companies which invest in selected economic zones or in projects encouraged by the state, such as energy, communications and transport. It also authorized some foreign banks to open branches in Shanghai and allowed foreign investors to purchase special "B" shares of stock in selected companies listed on the Shanghai and Shenzhen Securities Exchanges. These "B" shares are sold to foreigners but carry no ownership rights in a company. In 1999, China received nearly $39 billion in foreign direct investment.

Related Topics:
Joint venture - Nationalization - Chairs - Boards - Wholly Foreign Owned Enterprise - Transport - Stock - Shenzhen

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Opening to the outside remains central to China's development. Foreign-invested enterprises produce about 45% of China's exports, and China continues to attract large investment inflows. Foreign exchange reserves totaled about $659 billion in March 2005, more than doubling from March 2003. (316 billion)

~ ~ ~ ~ ~ ~ ~ ~ ~ ~